On 19-20 May 2015, the Financial University of the Russian Federation held its first international conference on the topic of "WTO Law in the Legal System of the Russian Federation: Problems of Application and Teaching." To my knowledge, this was the first international legal conference held to address the Russian Federation's 2012 accession to the World Trade Organization (WTO) and the current role of the Russian Federation in the WTO. The Financial University under the Government of the Russian Federation (Finuniversitet) is a leading publicly-funded institution of higher professional education (whose roots go back to the early 20th century). The conference was supported by a grant from the U.S. Russian Foundation for Economic Advancement and the Rule of Law (USRF).

The conference consisted of over two dozen presentations regarding international trade law and policy and the trade law of the Russian government.

Among the main lecturers on the first day of the conference were: Jan Bohanes, senior counsel of the Advisory Centre on WTO Law (Geneva), who lectured on constructed normal value in antidumping; Professor Steve Charnovitz of George Washington University Law School (Washington, D.C.) who lectured on the WTO-plus provisions in the Russian WTO accession package; Professor Anatoly Kapustin, Head of the Legal Comparative Research Centre who lectured on Russia and WTO Law; Professor Vasilka Sancin of the University of Ljubljana who lectured on models for an appellate mechanism in investor-state dispute settlement; Anait Smbatyan, Senior Expert at the WTO Expertise Center (Moscow) who lectured on WTO implementation; Eric M. Solovy, partner at Sidley Austin LLP (Washington, DC) who lectured on the obligations of and caselaw under the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS) and the WTO Agreement Subsidies and Countervailing Measures (SCM). Excellent additional presentations were made by Mark G. Pomar, President of USRF and by Professor and Deputy Rector Dmitry Sorokin of Finuniversitet.

On the second day of the conference, two parallel workshops were held featuring scientific presentations by leading academics and practitioners from Moscow and other Russian cities. Several presentations addressed the challenges and opportunities of teaching international economic law to Russian students. In addition, Professor Alexey N. Ruzhin of the Russian Foreign Trade Academy gave a lecture on the enforcement of international trade and customs law in the Russian economy.

Organizing a major global conference on WTO law is a difficult task and Financial University Associate Professor Igor Shulyatyev is to be commended for planning and carrying out a landmark conference on key policy and technical challenges facing the Russian government in its WTO membership. In the future, the Financial University should consider building on its success and holding a second annual conference in 2016.

I've often seen references to the 1957 Hawaiian court case Territory v. Ho, in which a Hawaiian law requiring those selling foreign eggs to display a "WE SELL FOREIGN EGGS" sign was struck down as a violation of the GATT (via Article VI, clause 2 of the Constitution). Now, thanks to Google, it is available online. We are not likely to see similar reasoning by a domestic court today, but it is an interesting read nonetheless:

In this case, information was filed against defendant for offering or exposing for sale imported chicken shell eggs of Australian origin without complying with section 1308.02 of the Revised Laws of Hawaii 1945. The section is a new section added to chapter 20 of the Revised Laws, relating to sale of eggs, by section 5 of Act 167 of the Session Laws of 1955. It provides that it is unlawful for any person to sell, offer or expose for sale any imported chicken shell eggs of foreign origin unless a placard bearing the words "WE SELL FOREIGN EGGS" printed in legible boldface letters of a size not less than three inches566in height is displayed in a conspicuous place where the customers entering can see it.

Act 167 also amended, by section 1 thereof, section 1307 of the Revised Laws, relating to grading standards and regulations. It authorized the board of commissioners of agriculture and forestry to make rules and regulations with respect to sale and transportation for sale of eggs for human consumption; grades or standards of quality and condition; size and weight classes; inspection and classification; assessment and collection of fees for requested certification; labeling of containers of imported and locally produced eggs; character of newspaper advertisements, posters or signs as to size, grade and geographic origin of eggs offered or exposed for sale; seller's invoice for sale of eggs; records of imported shell eggs of foreign origin; and enforcement of the provisions of the subtitle of chapter 20 relating to eggs and the rules and regulations promulgated under the authority of such subtitle.

To the information, defendant filed a demurrer and set forth ten grounds in support thereof. The court below sustained the demurrer on three grounds, namely (a) that Act 167, and in particular section 5 thereof, is in contravention of the fifth and fourteenth amendments to the Constitution of the United States in that it deprives defendant of his property without due process of law by preventing the sale of his property without compliance with its provisions, which provisions are in excess of the lawful exercise of the police power of the Territory; (b) that the Act is void in that section 1 thereof authorizes the board to make rules and regulations without defining any standards therefor; and (c) that the Act is in contravention of clause 2 of Article VI of the Constitution of the United States in that its provisions are in conflict with the express provisions of the General Agreement on Tariffs567and Trade to which the United States and Australia are signatories.

Defendant is charged with violation of section 5 of Act 167, not with violation of any rule or regulation promulgated under section 1. Consequently, we deem it unnecessary to discuss the legality of section 1. We are of the opinion that the demurrer was properly sustained on the ground that section 5 contravenes the General Agreement on Tariffs and Trade.

The General Agreement on Tariffs and Trade is a multilateral agreement originally entered into on October 30, 1947, by twenty-three nations, including the United States and Australia. (61 Stat. Part 5) It was modified by the Geneva Protocol of September 14, 1948. (62 Stat. 3679) It was executed on behalf of the United States by a plenipotentiary of the President. It is not a treaty made by the President by and with the advice and consent of the Senate under Article II, section 2, of the Constitution of the United States. It is an executive agreement made in the exercise of the authority granted to the President "To enter into foreign trade agreements with foreign governments or instrumentalities thereof," under section 350 (a) of the Tariff Act of 1930, as amended. The constitutionality of the grant of such authority has been repeatedly questioned in and out of Congress. Nevertheless, Congress has extended from time to time the period during which the President may exercise such authority. The latest extension is contained in Trade Agreements Extension Act of 1955, which extends the authority until the close of June 30, 1958. In the Act, Congress provided, "That the enactment of the Trade Agreements Extension Act of 1955 shall not be construed to determine or indicate the approval or disapproval by the Congress of the executive agreement known as the General Agreement on Tariffs and Trade."

Article VI, clause 2, of the Constitution of the United568States provides that "all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land." Under this constitutional provision, there is no question that a treaty made by the President, by and with the advice and consent of the Senate, is the supreme law of the land, overriding all state laws in conflict therewith. This case poses the question: Is an executive agreement, such as the General Agreement on Tariffs and Trade, a treaty within the meaning of this constitutional provision, so that it has the same efficacy as a treaty made by the President by and with the advice and consent of the Senate? We think that it is, under the decisions of the Supreme Court of the United States inUnited Statesv.Belmont,301 U.S. 324,andUnited Statesv.Pink,315 U.S. 203. In both cases the court had under its consideration an executive agreement known as the Litvinov Assignment. InUnited Statesv.Belmont,the court stated at page 331: "Plainly, the external powers of the United States are to be exercised without regard to state laws or policies. The supremacy of a treaty in this respect has been recognized from the beginning. * * * And while this rule in respect of treaties is established by the express language of cl. 2, Art. VI, of the Constitution, the same rule would result in the case of all international compacts and agreements from the very fact that complete power over international affairs is in the national government and is not and cannot be subject to any curtailment or interference on the part of the several states." InUnited Statesv.Pink,the court stated at page 230, "A treaty is a `Law of the Land' under the supremacy clause (Art. VI, Cl. 2) of the Constitution. Such international compacts and agreements as the Litvinov Assignment have a similar dignity."

The Territory isa fortioribound by an international agreement having the dignity of a treaty because section56955 of the Organic Act specifically enjoins that its legislative power be exercised consistently with the Constitution and laws of the United States.

Then, in what respects does section 5 of Act 167 contravene the General Agreement on Tariffs and Trade?

The General Agreement on Tariffs and Trade provides in Article III, paragraphs 1 and 4, as follows:

"1. The contracting parties recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production."

"4. The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product."

Certain exceptions to the above quoted provisions are set forth in Article XX of the agreement, as follows:

"Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement570shall be construed to prevent the adoption or enforcement by any contracting party of measures:

I. (a) necessary to protect public morals;

(b) necessary to protect human, animal or plant life or health;

* * * * *

(d) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Agreement, including those relating to customs enforcement, the enforcement of monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents, trade marks and copyrights, and the prevention of deceptive practices."

Section 5 of Act 167, in requiring a conspicuous display of a placard of origin, singles out chicken shell eggs of foreign origin from domestic eggs. No such requirement is imposed in connection with the sale, or offering or exposing for sale, of chicken shell eggs of local or mainland origin. That its purpose is to protect domestic production is indicated by the following statement in Standing Committee Report No. 482 to the President of the Senate, Twenty-Eighth Legislature: "Your Committee conducted a public hearing, at which time it was determined that the majority of poultrymen in the Territory were in favor of this measure." Thus, it contravenes the proscription of Article III, paragraph 1, of the General Agreement on Tariffs and Trade that internal laws affecting the internal sale or offering for sale should not be applied to imported products so as to afford protection to domestic production. Furthermore, in imposing an additional requirement on foreign eggs which is not imposed on domestic eggs, it contravenes Article III, paragraph 4, of the agreement which provides that the products of the territory of any contracting party imported into the territory of any other contracting571party shall be accorded treatment no less favorable than that accorded to like products of national origin in respect of all laws affecting their internal sale or offering for sale.

The requirement of section 5 of Act 167 does not come within any of the exceptions in Article XX of the agreement. Such requirement is not necessary for the protection of public morals; nor is it necessary for the protection of human, animal or plant life or health.

If it be deemed that a measure to prevent deceptive practices is necessary, such a measure, more comprehensive and nondiscriminatory, is found in section 1308 of the Revised Laws, which provides: "In the case of eggs imported from the mainland United States or foreign countries, regardless of the person producing the same, each egg so imported shall be marked in clear and plain letters, of not less than twelve point type, the letters `U.S.', if such egg was produced in the mainland United States, or the name of the country, if such egg was produced in a foreign country, before such eggs may be removed from any dock or landing * * *." The exception under Article XX of a measure relating to the prevention of deceptive practices is subject to the requirement that such a measure is not applied "in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade." We think that the additional requirement of a placard of origin only in the case of foreign eggs constitutes a disguised restriction on international trade.

Bosnia's top court has annulled an import tax law which it said violated a regional free trade treaty and commitments to the EU, while about 1,000 farmers and food producers protested outside the court building.

The law imposed duty on around 1,000 imported products, and was approved by parliament in June despite strong objections from the European Union and neighbouring countries.

...

The European Union said the law breached the Central Europe Free Trade Agreement (CEFTA) agreed by Balkan countries in 2006 to boost regional trade and prepare for EU single market entry.

It said the law also violated Bosnia's commitments under its 2008 Stabilisation and Association Agreement (SAA) with the EU, the country's first formal contract with the 27-nation bloc.

Based on the article, it sounds like the court struck down the law as a result of its conflict with international trade agreements. However, the actual reasoning may be more nuanced than reported.

I came across two items related to the treatment of international trade agreements in domestic law. I'm going to combine them in this post even though they are completely unrelated otherwise.

1. From the R-CALF (a group which represents U.S. cattle producers) submission to USTR related to the Canadian/Mexican complaints on the U.S. country of origin labelling law (COOL) dispute (DS384 and DS386):

R-CALF USA believes it is fundamentally contrary to our U.S. Constitution for the United States Trade Representative (“USTR”) to agree that foreign governments – specifically Canada and Mexico – have any standing whatsoever to bring a complaint against our constitutionally passed mandatory country-of-labeling (“COOL”) law.

Our domestic COOL law imposes no duty or restrictions on any foreign government; it does not impose any limits on the volume or type of commodities that a foreign country may export to the United States; foreign countries are not obligated, in any way, to export to the United States any of the commodities that would be subject to our COOL law – hence, a foreign country’s decision to market their products in the U.S. market and under the rules of the U.S. market is purely voluntary; and, COOL jurisdiction is exclusively limited to United States retailers, as defined exclusively by U.S. law, and subjects all covered commodities marketed by U.S. retailers to identical information requirements, regardless of where the commodities originate. Thus, our domestic COOL law does not affect international trade agreements and it is fundamentally inappropriate for the World Trade Organization (“WTO”) to even entertain a foreign country’s complaint against our domestic COOL law. Further, and for the foregoing reasons, the USTR should not consent to WTO jurisdiction over our domestic COOL law.

Assuming, but only hypothetically, that United States officials had inadvertently surrendered the right of its sovereign U.S. citizens to govern themselves – as guaranteed by our U.S. Constitution – to the WTO, the complaints by Canada and Mexico against our domestic COOL law would still be baseless and wholly without legitimacy. ...

I'm not completely sure I follow this, but I think they are saying that because of the nature of the COOL law (for example, that it is not a border measure), it should not be covered by WTO rules. Thus, the WTO has no jurisdiction over it. In addition, they seem to argue that, as a matter of domestic law, allowing the WTO to have jurisdiction over such a measure violates the U.S. Constitution.

Speaking very generally, it seems to me that the R-CALF position is in line with those of other groups who want to narrow the scope of international trade agreements. Such arguments are not likely to have much impact with a WTO panel, but I wonder whether they plan to pursue this argument in a domestic forum. Do they have some type of constitutional challenge in mind? I'm not sure if submitting this kind of argument to USTR is pretty standard and never goes anywhere, or if there is some significance to R-CALF including it here.

A Bosnian court said on Saturday it had temporarily suspended a recently adopted law on protection of domestic production seen as violating a regional trade pact and the Balkan country's commitments toward the EU.

The Constitutional Court of Bosnia-Herzegovina decided to suspend the law on the request of the chairman of the upper house of the country's parliament Ilija Filipovic, it said in a statement.

The law will be suspended until the court reaches a final decision on Filipovic's motion at one of its coming sessions.

The controversial law imposing higher customs duties on nearly 1,000 items was passed by parliament earlier this month despite strong opposition from the European Union and Bosnia's neighbours.

The EU said the law violated the Central European Free Trade Association accord (CEFTA) reached by the Balkan countries in 2006 with the aim of boosting regional trade and preparing members for the EU single market.

I looked for the decision online, but could not find it. I am curious to hear more about the court's reasoning. Did they have much to say about the role of international law in domestic law? Maybe not in this decision, but perhaps there will be something in the final decision.

On SSRN, Professor Michael Paulsen has posted "The Constitutional Power to Interpret International Law." An extract from the paper:

What, then, of international bodies’ interpretations of international law, including international treaties to which the United States is party—such as the U.N. Charter, the Geneva Conventions, and the Convention Against Torture? Are international bodies’ (like the International Court of Justice’s) interpretations of these international treaties binding on the United States?

It follows from what has already been discussed that the answer must be no. As a matter of U.S. constitutional law, the interpretation of U.S. law, including U.S. treaties, cannot be authoritatively or finally vested in non-U.S. authorities. Such persons or bodies possess no part of the Constitution’s authority. They are not officers of the government of the United States, within the meaning of that term as used in the Constitution. They are certainly not Article III judges. Their decisions may not govern the United States. Nor may U.S. government actors cede their constitutional powers to such persons or entities. U.S. officials of course may consider what international organizations or courts have to say about America’s international obligations. And surely the President may contract (by treaty or by executive agreement) with other nations to agree to submit certain disputes to resolution by international or neutral authorities, and thereby create international and moral obligations. But no such agreement literally may dictate or control the actions of U.S. government authorities. It follows that no decision of an international tribunal or court may be self-executing—binding on U.S. executive, legislative, or judicial authorities— consistently with the Constitution, unless U.S. law (self-executing treaty or statute) both makes it so and makes it so in a fashion permitted by the U.S. Constitution.

Thus, Professor Paulsen takes the position that the interpretations of international tribunals are not "binding" on the United States. (In the WTO context, many people will recall the well-known exchange between Judith Bello (whose article is not online as far as I can tell) and Professor John Jackson (whose article is online here:(http://www.asil.org/ajil/v9160.pdf ) on similar issues.

I find some aspects of the discussion of whether international decisions are "binding" confusing. I'm often left unsure about what people are saying exactly. I suppose it may depend on what is meant by "binding." Does calling an international decision (and the interpretations therein) "binding" mean that there is a mechanism to force the United States (or other countries) to follow the ruling of the international tribunal? If so, then the interpretations of these tribunals are probably not binding, because there is no way to force compliance (although there are, in some international agreements, mechanisms to encourage compliance). So in that sense, an interpretation by an international tribunal is not "binding."

On the other hand, "binding" could also mean that the interpretation offered by the tribunal is formally part of a treaty's body of law. Thus, for example, under the DSU, panels and the Appellate Body interpret (technically speaking, they "clarify") the WTO agreements. Are these clarifications "binding" in the sense that they become a formal part of WTO law, which the United States has agreed to follow? I would say the answer is yes.

Based on the above quote, however, I'm not completely sure what Professor Paulsen's view is on this. At one point he says, "As a matter of U.S. constitutional law, the interpretation of U.S. law, including U.S. treaties, cannot be authoritatively or finally vested in non-U.S. authorities." That makes me think his answer would be a clear no. But later he says "no such agreement literally may dictate or control the actions of U.S. government authorities"; and, "It follows that no decision of an international tribunal or court may be self-executing—binding on U.S. executive, legislative, or judicial authorities"; and also, "And surely the President may contract (by treaty or by executive agreement) with other nations to agree to submit certain disputes to resolution by international or neutral authorities, and thereby create international and moral obligations." These statements make me wonder if he has something more limited in mind. For example, perhaps his view is that interpretations by international tribunals can, in fact, be part of international law as part of that law in and of itself; however, they cannot be part of that law as it is incorporated into domestic law. Thus, taking the WTO context as an example, interpretations by the Appellate Body could be part of the WTO law that is applied by panels and the Appellate Body in future WTO disputes. However, they cannot play the same role in U.S. law as the WTO Agreement itself does. That is to say, international agreements play a special role in domestic law, and international decisions interpreting the agreements do not play this same role. (If I recall correctly, this is the view taken in recent years in some U.S. Court of International Trade decisions.) If he does take this latter view, I can see why he argues that the decisions are not "binding" on the United States. That is true, in one sense. But in another sense, they are, as they become part of U.S. international obligations.

EU law experts will probably have more insights into this then I will, but I thought it worth noting the latest developments in the case in which some European companies claimed compensation under EU law for financial damages arising from the U.S. sanctions in the EC - Bananas case. Reuters reports:

In its judgment, the European Court of Justice upheld an earlier ruling that a lower EU court issued in 2006 holding that the EU should not compensate companies for any losses incurred as a result of the increased U.S. import tariffs.

The European Community "cannot be called upon to make good damage resulting from a failure of its institutions to comply with the WTO agreements," the court said in a statement.

125 The distinction which the appellants seek to draw between the ‘direct effect’ of the WTO rules imposing substantive obligations and the ‘direct effect’ of a decision of the DSB, asserting that it should be open to individuals to have the legality of the conduct of the Community institutions reviewed by the Community courts in the light of the DSB decision itself if such a review is not possible in the light of the WTO rules which that decision has found to have been infringed, calls for the following comments.

126 Even though the Court has not yet been required to rule expressly on such a distinction, it nevertheless necessarily follows from its case-law mentioned above that there is no basis for the distinction.

127 In holding that the WTO rules which have been found by a decision of the DSB to have been infringed cannot, notwithstanding the expiry of the period of time laid down for implementing that decision, be relied upon before the Community courts for the purpose of having the legality of the conduct of the Community institutions reviewed by the Community courts in the light of those rules, the Court has necessarily excluded such a review in the light of the DSB decision itself.

128 A DSB decision, which has no object other than to rule on whether a WTO member’s conduct is consistent with the obligations entered into by it within the context of the WTO, cannot in principle be fundamentally distinguished from the substantive rules which convey such obligations and by reference to which such a review is carried out, at least when it is a question of determining whether or not an infringement of those rules or that decision can be relied upon before the Community courts for the purpose of reviewing the legality of the conduct of the Community institutions.

129 A recommendation or a ruling of the DSB finding that the substantive rules contained in the WTO agreements have not been complied with is, whatever the precise legal effect attaching to such a recommendation or ruling, no more capable than those rules of conferring upon individuals a right to rely thereon before the Community courts for the purpose of having the legality of the conduct of the Community institutions reviewed.

130 First, as is apparent from paragraphs 113 to 124 of the present judgment, the considerations linked to the nature of the WTO agreements and to the reciprocity and flexibility characterising them continue to obtain after such a ruling or recommendation has been adopted and after the reasonable period of time allowed for its implementation has expired. The Community institutions continue in particular to have an element of discretion and scope for negotiation vis-à-vis their trading partners with a view to the adoption of measures intended to respond to the ruling or recommendation, and such leeway must be preserved.

131 Second, as is apparent from Article 3(2) of the DSU, recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the agreements concerned. It follows in particular that a decision of the DSB finding an infringement of such an obligation cannot have the effect of requiring a party to the WTO agreements to accord individuals a right which they do not hold by virtue of those agreements in the absence of such a decision.

132 It should, in particular, be recalled in this regard that the Court has already held in relation to the provisions of the GATT 1994, which have been found by the DSB to have been infringed in the present case, that those provisions are not such as to create rights upon which individuals may rely directly before the courts by virtue of Community law (see, to this effect, the order in OGT Fruchthandelsgesellschaft, paragraphs 25 and 26).

133 It follows from all of the foregoing considerations that the Court of First Instance rightly decided that, notwithstanding the expiry of the period of time allowed for implementing a decision of the DSB, the Community courts could not, in the circumstances of the case in point, review the legality of the conduct of the Community institutions in the light of WTO rules.

I'm a bit late to this, but it's an interesting case and I thought I should start following it. As an old NY Times article explains, there are often tariff differences in the U.S. tariff schedule between men's and women's versions of clothing. For example, a 14 percent tariff on women’s overalls as compared to a 9 percent tariff on men’s overalls. Some clothing manufacturers challenged this treatment before the CIT, as a violation of the due process and equal protection clauses of the Constitution. The first ruling came in July. I'm not that familiar with the issues, so I'll just quote and refer to others. Lawrence Friedman of the Customs Law blog explains the result as follows:

I'm going to read the case more carefully and will provide a fuller analysis, but here are the highlights I have gleaned this morning:

Because the tariff differential is implemented in a statute, review of its constitutionality is not precluded by the political question doctrine. In other words, this is not purely a questions of policy or negotiations, it is a tariff law that can be reviewed.

Totes, as the importer, has standing to pursue the case even though it is only indirectly affected because it is being used to implement the allegedly discriminatory measure.

Totes' claimed injury is a direct result of alleged express discrimination and, therefore, it falls within the zone of interest protected by the constitution.

However, Totes has a problem. In its complaint, Totes did not assert any facts showing a right to relief. Flipping this around, it seems to be a requirement for pleading real, as opposed to possible injury. What Totes apparently failed to do is assert that what appears to be express gender discrimination is not based upon some legally sufficient governmental justification. Having failed to allege a purpose or intent to disfavor one protected class (e.g., men), the Totes complaint is insufficient to state a claim on which relief can be granted. Another aspect of this is that there is no clear link between these tariff designation of products and the actual use of them. Totes has not asserted in its complaint that men buy men's gloves and women by women's gloves.

As a result, the Court of International Trade dismissed the case. Importantly, the dismissal was without prejudice meaning that Totes may be able to adjust its pleading and re-file. Of course, even if this case cannot be fixed, there are a large number of cases pending before the Court. That means, it appears this issues will get hashed out on the substance.

So says a magistrate judge. As you mayrecall, the defendants invoked the WTO Gambling decision as a defense against their prosecution for various gambling related crimes. Some excerpts from the ruling:

As an initial matter, the defendants do not have standing to raise alleged violations of the GATS or the rulings of any WTO body. “However, ‘WTO decisions are not binding on the United States, much less this court’”.

...

Defendants have no standing to raise the argument that the instant prosecution is prohibited by the GATS. Even if they did, based on the enabling legislation, as set out above, their arguments are without merit and their Motions to Dismiss on that ground should be denied.

...

... the Charming Betsy canon has no application to United States statutes concerning the GATS and its dispute resolution process.

...

The defendants rely on the GATS treaty and the rulings of the WTO Appellate Body as a defense to the charges. This treaty does not create private or individual rights. It does not directly impact domestic law. The defendants have no standing under the GATS to challenge this prosecution. The federal statutes authorizing the Uruguay Round Agreements preclude reference to the GATS, WTO panel reports or appellate body rulings in determining the legality, application and scope of United States statutes. The defendants’ various Motions to Dismiss the Superseding Indictment on the ground that the instant prosecution constitutes a violation of United States treaty obligations should be denied.

Not a particularly surprising result, but fun to see it argued nonetheless.

The Supreme Court said Monday it will rule on a case that could make it harder for U.S. companies to obtain protective tariffs on low-priced foreign goods.

The dispute centers on whether uranium that U.S. utilities send to France for enrichment and then import for use in nuclear power plants qualifies as a 'good' or 'service.'

...

In the case accepted by the court, a French uranium enrichment company, Eurodif SA, and a group of U.S. utilities argue that only the service of uranium enrichment is being imported, because the raw uranium was provided by the utilities. As a result, the enriched uranium shouldn't be subject to antidumping duties, they say.

The Commerce Department, however, decided in 2002 that enriching uranium is a 'manufacturing process' and not a service, and imposed a 20 percent antidumping duty on imports from Eurodif.

But the U.S. Court of Appeals for the Federal Circuit overruled Commerce in September 2007. That prompted the Bush administration and USEC Inc. (NYSE:USU) , a Bethesda, Md.-based company that is the sole U.S. uranium enricher, to appeal to the Supreme Court.

The Justice Department's Solicitor General, the administration's lawyer, said the appeals court's ruling 'has opened a potentially gaping loophole in the nation's trade laws' by encouraging U.S. importers and foreign companies 'to structure their transactions as contracts for 'services'' rather than for goods in order to avoid punitive duties.

Oral argument will be scheduled for the court's next term, which begins in October. The dispute consists of two cases, U.S. v. Eurodif, 07-1059, and USEC v. Eurodif and the Ad Hoc Utilities Group, 07-1078.

I heard about this case a number of years ago, but never really thought through the issues. My gut reaction is that WTO rules would permit anti-dumping duties to be imposed in this situation. While there is a service involved here, ultimately there is a good being imported, and thus anti-dumping duties are pemissible. However, I'm not sure what U.S. law says about it or what the Supreme Court will think of it. I'll try to follow the case as it develops next year.

ADDED: Here's the cert petition, with many related documents attached. I may have to re-think my views on how WTO rules would apply. I'm not sure I understand the facts completely at this point.

Here's my question: Was the uranium in question subject to normal tariff duties when it was entered into the United States after enrichment? I skimmed through some of the documents related to the case, but did not see the answer at first glance. (That's not to say it's not in there; there was a lot to read through, and I could have missed it).

The international law experts at Opinio Juris will have more insightful things to say about today's Medellin decision than I could ever think of, but one issue jumped out at me when I skimmed through it. At page 8, the Court says:

No one disputes that the [ICJ's] Avena decision—a decision that flows from the treaties through which the United States submitted to ICJ jurisdiction with respect to Vienna Convention disputes—constitutes an international law obligation on the part of the United States.

What I wonder is, can we now assume that WTO decisions (e.g., adopted panel and Appellate Body reports) constitute "international law obligations" of the United States? (Not "domestic law obligations," of course, which is another matter entirely.) The reason I ask this question is that U.S. appellate court decisions addressing WTO decisions in U.S. law seem to imply that they are not. For example, in the 2005 Corus Staal decision, after noting that the Charming Betsy doctrine of claim construction states that "courts should interpret U.S. law, whenever possible, in a manner consistent with international obligations," the CAFC had this to say: "WTO decisions are 'not binding on the United States, much less this court.'” I took the CAFC's statements in that case to mean that while the Anti-Dumping Agreement is an "international obligation" of the United States, WTO decisions interpreting that agreement are not.

This leads me to the following question: Does the Supreme Court's statement in Medellin undercut this at all? Looking at the DSU rules in relation to the ability to enforce ICJ judgements, WTO decisions seem like fairly strong "international law obligations" to me. If ICJ judgements are "international law obligations," shouldn't WTO decisions be as well?

I'm not quite sure what the implications of this would be. Given the reluctance of U.S. courts to find that international decisions (or even international agreements) create domestic law obligations, it may not have much of a practical impact. But it would be nice to have it acknowledged anyway.

The Gambling dispute has been great for opportunities to raise WTO law in domestic law. Here's another example, from the Imega vs. Gonzalez decision, issued this past week by the U.S. District Court for the District of New Jersey, which involved a complaint against the Unlawful Internet Gambling Enforcement Act of 2006:

C. WTO Claims (Counts IV, V)

The plaintiff alleges that UIGEA is void because it is ultra vires of, and otherwise inconsistent with, the foreign trade obligations of the United States. But prudential standing considerations bar judicial review here. Although some treaty obligations may create a private cause of action, see Sanchez-Llamas v. Oregon, 126 S.Ct. 2669, 2680 (2006) (assuming, but not deciding, truth of proposition), that is not the case as to the Uruguay Round Agreements at issue here. Indeed, the statute pertaining to the Uruguay Round Agreements precludes private actions: only the United States "may challenge ... [an] action or inaction by [a] department, agency, or other instrumentality of the United States ... on the ground that such action or inaction is inconsistent with [the Uruguay Round Agreements.]" 19 U.S.C. § 3512(c)(1)(B). The economic rights of private individuals are thus not within the "zone of interests intended to be protected by" the Uruguay Round Agreements. Oxford Assoc., 271 F.3d at 146. The plaintiff, as it has no cause of action under the WTO, cannot satisfy prudential standing as to its WTO claims.

Even if the Court were to consider the merits of the WTO claims, UIGEA "which was enacted in 2006" would trump any obligations arising under the 1994 Uruguay Round Agreements. See 19 U.S.C. § 3512(a)(1) ("[n]o provision of any of the Uruguay Round Agreements ... that is inconsistent with any law of the United States shall have effect"); see, e.g., Tag v. Rogers, 267 F.2d 664, 667 (D.C. Cir. 1959) ("has long been established that treaties and statutes are on the same level and, accordingly, that the latest action expresses the controlling law"). Also, WTO decisions are "not binding on the United States, much less this court." Corus Staal BV v. Dep't of Commerce, 395 F.3d 1343, 1348 (Fed. Cir. 2005) (quotes and cite omitted). The plaintiff's WTO claims would thus fail as a matter of law.

This decision doesn't seem to break any new ground, but rather just repeats various reasons why the court doesn't want to accept a defense based on WTO obligations. Also, since this claim dealt with the UIEGA, it was more difficult to raise WTO obligations then some other cases, as the UIEGA was not part of the WTO claim.

A large and sophisticated literature examines the normative desirability of granting "direct effect" to WTO law in domestic courts. However, much of this scholarship focuses on civil litigation. A related, but largely unexplored, question relates to the impact, if any, of WTO law on criminal prosecutions. In particular, can individuals be criminally prosecuted for violation of domestic laws found to be WTO-inconsistent?

A U.S. district court recently addressed this issue. The case involved a criminal prosecution for, inter alia, violations of the Wire Act. The defendants argued that the Wire Act charges should be dismissed "because (1) the Charming Betsy canon of construction and the principle of international comity dictate that the Court interpret the Wire Act . . . so as not to violate [WTO] violations; and (2) the WTO's Appellate Body decision in the Antigua gambling case is self-executing and therefore binding upon this Court."

In U.S. v. Lombardo, the federal district court for the District of Utah had little difficulty dismissing these arguments. First, the court held that the Charming Betsy argument was unavailing because this canon of construction comes into play only when federal statutes are ambiguous. However, the court held that the unambiguous terms of the Wire Act clearly apply to online gambling. The court then held that defendants could not rely upon the AB report in the Gambling dispute because U.S. courtrs are not bound by AB reports, and because the implementing legislation expressly forecloses "any cause of action or defense under any of the Uruguay Round Agreements" to parties other than the federal government.

As Simon has noted, a similar motion to dismiss on the basis of the Gambling report is pending in the criminal prosecution of Gary Kaplan and Betonsports in the Eastern District of Missouri. The Lombardo decision is broadly consistent with other federal court decisions refusing to give effect to panel or AB reports in civil litigation. See, e.g., Corus Staal v. U.S.

Are others aware of any other jurisdictions that have considered the "direct effect" question in the criminal context? Are there legal or policy reasons to have a different rule on "direct effect" when it comes to criminal prosecutions?

Jeff Dunoff

P.S. Thanks to Simon Lester for tracking down a copy of the Lombardo decision, which can be accessed here.

Under Charming Betsy, if possible, federal laws, including criminal statutes, must be read so as not to conflict with the international obligation, and the Wire Act can be so construed. First, the Wire Act may be read so as not to have an extraterritorial application. In this regard, there is a strong presumption that statutes, including criminal statutes, do not operate extraterritorially. Second, under Charming Betsy, the Wire Act may and must be construed so as not to apply to internet gambling: "The internet did not even exist in the early 1960s when the Wire Act was enacted; it surely was not what Congress intended to address."

The Charming Betsy doctrine may be thought of as an expression of a broader principle of international comity, which itself mandates dismissal of the Wire Act charges. Under that principle: "U.S. courts should strive to the fullest extent possible in the application of domestic law to show due respect for the fundamental interests of other nations in matters of legitimate concern to them.45 By virtue of international comity, U.S. courts avoid interpretations or applications of domestic law that do unnecessary violence to foreign countries’ important interests. ... International comity strongly counsels a showing of respect by U.S. courts for rulings of the WTO Appellate Body when construing national legislation, particularly where that legislation has been clearly and authoritatively condemned, at least as applied to situations governed by WTO law. Such is precisely our case."

"[G]iven the completion of the dispute resolution proceedings, the WTO Dispute Settlement rulings in the gambling case are self-executing, and Kaplan may rely upon them. ... The principal reason why the substantive provisions of the WTO Agreement are not self-executing and do not give a direct cause of action to individuals before domestic courts is the existence of the elaborate WTO Dispute Settlement procedures. When a State is alleged to have violated its international legal obligations under the WTO is made, that State may contest both the facts and the interpretation and application of WTO law. It may take its case before a Panel. It may appeal an adverse position of the Panel to the Appellate Body. It may seek to persuade other members of the Dispute Settlement Body not to adopt the ruling of the Panel and Appellate Body. It may be given time to implement the adverse ruling. It may contest any challenge to its attempted implementation before a Compliance Panel and appeal any decision of such Panel to the Appellate Body. It would be wrong for a domestic court to apply directly a substantive provision of the Agreement if in doing so such court would short-circuit the dispute settlement procedures with all the protections they give a member of the WTO. But here those procedures have been completed and all those protections have been enjoyed"

The conclusion:

"The government’s attempted use of these statutes to prosecute Kaplan – and to send a signal to others engaged in the provision of internet gambling services from nations that are members of the WTO – represents a violation of obligations the United States has assumed under WTO/GATS. The prosecution violates U.S. treaty obligations, international principles of comity, and domestic law. The indictment in its entirety must be dismissed."

Now this is interesting. I haven't had a chance to digest it fully, but I thought it worth noting for everyone now. I may come back to it once I've had a chance to think about it more.

A few months ago, the FBI arrested BETonSPORTS.com founder Gary Kaplan on charges of racketeering, conspiracy and fraud, in relation to the company's web site gambling operations. Kaplan now argues that the WTO panel/AB rulings in the Gambling case should get him off:

Defendant Gary Stephen Kaplan moves, pursuant to Rule 12(b) of the Federal Rules of Criminal Procedure,1 to dismiss the charges against him based upon treaty obligations and related principles of domestic and international law. The treaty obligations are those the United States has assumed under the General Agreement on Trade in Services (“GATS”) and the Dispute Settlement Understanding (“DSU”) which applies to the GATS. These obligations, recognized by both the authoritative dispute resolution bodies of the World Trade Organization (“WTO”) and by U.S. law, foreclose this prosecution, requiring dismissal not only of the Wire Act charges, but of every count that seeks to penalize Kaplan for activities related to the provision of cross-border remote gambling services, that is to say, all of the charges in the Superceding Indictment.

There is talk about Chaming Betsy, international comity, and the self-executing nature of WTO rulings, among other things.

The status of WTO law in domestic law varies a bit from country to country, and is sometimes not very clear. The recent Indian court decision in the Novartis case was interesting, as the court basically said that any consideration of consistency of Indian law with the TRIPS Agreement should be done in WTO dispute settlement, not in Indian courts. Here's a link to the decision: http://judis.nic.in/chennai/qrydisp.asp?tfnm=11121 The key portion seems to be this part:

the Constitutional validity of section 3(d) alone is in challenge, both on the ground that it violates not only Article 14 of the Constitution of India but also on the ground that it is not in compliance to "TRIPS".

...

(a) Assuming that the amended section is in clear breach of Article 27 of "TRIPS" and thereby suffers the wise of irrationality and arbitrariness violating Article 14 of the Constitution of India, could the courts in India have jurisdiction to test the validity of the amended section in the back drop of such alleged violation of "TRIPS"? OREven if the amended section cannot be struck down by this court for the reasons stated above, cannot this court grant a declaratory relief that the amended section is not in compliance of Article 27 of "TRIPS"?.

(b) If it is held that courts in India have jurisdiction to go into the above referred to issue, then, is the amended section compatible or non-compatible to Article 27 of "TRIPS"?

...

8. Even otherwise, we are of the considered view that in whichever manner one may name it namely, International Covenant, International Treaty, International Agreement and so on and so forth, yet, such documents are essentially in the nature of a contract. In Head Money cases namely, the judgment of the Supreme Court of the United States reported in 112 U.S. 580, it is held as follows:

"A treaty is primarily a compact between independent Nations, and depends for the enforcement of its provisions on the honor and the interest of the governments which are parties to it."

Therefore there cannot be any difficulty at all in examining such treaties on principles applied in examining contracts. Under these circumstances, when a dispute is brought before a court arising out of an International Treaty, courts would not be committing any error in deciding the said dispute on principles applicable to contracts. In other words, the court has to analyse the terms of such International Treaty; the enforceability of the same; by whom and against whom; and if there is violation, is there a mechanism for solving that dispute under the treaty itself? Based on such construction of the International Treaty namely, "TRIPS", it is argued very strenuously by the learned counsels appearing for the contesting parties that there is a settlement mechanism under the Treaty itself and therefore even assuming without conceding that the petitioner has the right to enforce the terms of the said Treaty, yet, he must go only before the Dispute Settlement Body provided under the "TRIPS" itself. Article 64 of "TRIPS" is pressed into service to sustain this point. It is contended by Mr.Anand Grover learned counsel that the settlement mechanism provided under Article 64 of "TRIPS" is governed by the procedure as understood by the World Trade Organisation. Mr.Anand Grover learned counsel took us through the said Dispute Settlement Understanding. Article 1 of the Dispute Settlement Understanding, defines the areas covered under that Rule. Article 1 declares that the agreements listed in Appendix 1 to the said Rule would be covered by the procedure. "TRIPS" is mentioned as one of the agreements in Appendix 1 (B) - Annexure 1C. We have been taken through the above referred to Rules and Procedures governing the settlement of disputes and we find that it contains comprehensive provisions for resolving the disputes arising out of any agreements enumerated in Appendix 1 to that Rules. Under the Rules there is a Dispute Settlement Body. The manner of it's constitution is also provided therein. Various steps to sort out the problem arising out of an agreement are provided therein. Article 17 of the Rules referred to above provides an appellate review against the order passed by the panel. Therefore we have no difficulty at all that Article 64 of "TRIPS" read with World Trade Organisation's understanding on Rules and Procedures governing the settlement of disputes provides a comprehensive settlement mechanism of any dispute arising under the agreement. Article 3 of the Rules declares that the dispute settlement system of the World Trade Organisation is to provide security and predictability to the multilateral trading system. When such a comprehensive dispute settlement mechanism is provided as indicated above and when it cannot be disputed that it is binding on the member States, we see no reason at all as to why the petitioner, which itself is a part of that member State, should not be directed to have the dispute resolved under the dispute settlement mechanism referred to above. Several nations in the world are parties to "TRIPS" as well as the "WTO" agreement. The agreements are discussed, finalised and entered into at the higher level of the nations participating in such meeting. Therefore it is binding on them. When such participating nations, having regard to the terms of the agreement and the complex problems that may arise out of the agreement between nation to nation, decide that every participating nation shall have a Common Dispute Settlement Mechanism, we see no reason at all as to why we must disregard it. As we began saying that any International Agreement possesses the basic nature of an ordinary contract and when courts respect the choice of jurisdiction fixed under such ordinary contract, we see no compelling reasons to deviate from such judicial approach when we consider the choice of forum arrived at in International Treaties. Since we have held that this court has no jurisdiction to decide the validity of the amended section, being in violation of Article 27 of "TRIPS", we are not going into the question whether any individual is conferred with an enforceable right under "TRIPS" or not. For the same reason, we also hold that we are not deciding issue No.(b) namely, whether the amended section is compatible to Article 27 of "TRIPS" or not.

I don't have much to add to Rosa's analysis of Sanchez-Llamas and Hamdan, but as an interested party (author of an amicus brief in Sanchez-Llamas) l will elaborate a bit on the general approach to the relationship between international and domestic law that these two decisions represent. First, there are four Justices on the Court that seem skeptical of efforts to incorporate international law into domestic law absent a clear statement of incorporation by Congress. There are four votes on the Court for generous interpretations of legislation to incorporate international law, and perhaps to apply international law in other cases where a statute does not clearly forbid doing so. Justice Kennedy has not made his position clear. In Sanchez-Llamas, all nine Justices described the relationship of the SCOTUS and the ICJ as one of respect but not authority; that is to say, SCOTUS will listen to interpretations of international law adumbrated by the ICJ but feels free to reject those with which they disagree. For five justices, this stance was consistent with rejecting the (in my opinion poorly reasoned) decisions of the ICJ in LaGrand and Avena regarding procedural default. For three justices, this stance led to a (in my opinion heroic) interpretation of LaGrand and Avena that allowed room for a remand to the lower courts to determine whether state procedural rules "gave effect" to treaty obligations without any expectation of a different result. The majority in Sanchez-Llamas also referred to the deference that the judiciary owes to the Executive's interpretation of a treaty to which the US is a party, and the outcome reached was consistent with the Executive's position. The Court did not, however, allow that deference to substitute for its own independent analyis of the treaty in question.

Hamdan, and especially Justice Kennedy's crucial fifth-vote opinion, emphasizes the role of statutory incorporation of the laws of war; the decision does not support the claim that the Geneva Conventions would provide a rule of decision applicable in domestic litigation absent the incorporation that existing statutes mandate, although one can guess that at least four of the Justices would find that outcome congenial.

Lastly, nothing in the opinions suggests any direct limitation on the power of Congress to enact legislation that may be inconsistent with US obligations under international law. Again, four Justices seem strongly inclined to interpret statutory enactments in a manner that would minimize conflicts with international law; four recognize the principle but do not seem to regard it as having a high priority; and Justice Kennedy is enigmatic.

In case you were wondering how the Hamdan decision might relate to international economic law, and how the Supreme Court came to apply the Geneva Conventions, there is a nice post by Rosa Brooks at the Georgetown faculty blog explaining how Hamdan approaches international law. Basically, the relevant portions of the Geneva Conventions (common article 3) are specifically incorporated by reference in U.S. domestic law, and become judicially applicable (at least) to that extent.